Large FiberNet capital equipment expenditure OK’d by city council

Monticello City Council members unanimously approved a $210,000 capital expenditure Monday night for FiberNet, the city’s telecommunications and broadband provider.
General Manager Mark Pultusker presented the equipment request at the end of the council’s regular meeting.
City Administrator Jeff O’Neill added the agenda item earlier in the meeting.
“We need to invest some money into FiberNet,” Pultusker said, pointing out he made city leaders aware months ago that improved equipment was needed.
System testing equipment, additional staff training and adding equipment to place local advertising into programs made up the most of the capital request.
For example, Pultusker said one of the most expensive items on his list was an ad insertion splicer, a piece of equipment that carries a $50,000 price tag.
“We have the right to insert our own commercials for one or two minutes per hour of programming,” he said.  “It doesn’t matter what the programming is. We have not done that because it requires certain equipment. We can offer something Charter and TDS can’t offer. They can’t sell commercials to Monticello.”
Pultusker said the city could place ads on FiberNet for the liquor store or Monticello DMV that will reach subscribers outside of Channel 6 or Channel 12.
“There are other examples of smaller expenditures for things that should have been done years ago,” he said. “We don’t have testing or troubleshooting equipment. That makes it very difficult to diagnose and fix problems.”
Pultusker offered this example: “We used to have a blank screen problem. It took me 10 weeks to solve a problem that could have been solved in a week. Most of this should have been purchased when the original system was designed. Training staff costs money and time.”
According to Pultusker, the funds for the FiberNet capital expenditures will coming from already collected cable franchise fees. “It’s not taxpayer dollars,” he said. “It’s fees FiberNet, Charter, and now, TDS paid to the city. There’s a 5 percent tax on cable television revenue that’s distributed. Those funds have not been allocated for anything particular, so that’s where the money is going to come from. Hopefully, the money will provide better service and reduce our deficit.”
Finance Director Wayne Oberg said Tuesday that the FiberNet capital expenditure request would be drawn from the city’s streetlight fund. That’s the financial landing location for the cable franchise fees when the revenue comes into the city’s coffers. “We put our franchise fees into one account,” he said. “Some of that fund is set aside for the acquisition of utility-related equipment. Other money is used to maintain our streetlights in town. Telephone is considered utility.”
According to Oberg, Monticello’s streetlight fund currently has a $739,000 balance.
“We take what we get from the Sherburne-Wright Cable Commission and put those franchise fees into the streetlight fund, along with others.” There’s more than just one franchise fee in the city, Oberg said, referring to Charter and TDS.
“There’s two places this money goes,” Oberg added. “There’s a section in the general fund; we use some of the franchise fee to offset general fund expenses related to our street lights, and it goes into the streetlight fund for the purposes of capital items. General fund is maintenance, capital is improvement.”
O’Neill stated in an email Tuesday the actual purchase of the FiberNet capital items approved Monday night will follow the city’s established purchasing policies.
“Now is not the time to market FiberNet,” Pultusker added.
“Once we put these equipment items in place, we’ll be in position to do a different type of marketing. We’ll be able to demonstrate things and have people come to our office.”
The second, later phase of Pultusker’s capital equipment request presented last week [$100,000] includes a technology center.

Contact Managing Editor Tim Hennagir at [email protected]